Bankers for Bernie

Once a month, I indulge in a sugar covered coffee roll. I always get it from the same cart in midtown Manhattan. Most mornings, the cart is surrounded by construction workers in hard-hats and office workers in suits. The suits (including me) are heading into the tall office towers, for jobs at banks, broker-dealers, insurance companies and law firms. The construction guys are building fleets of towers for people who dress like us to work or live in. Most of them are headed back to homes in Staten Island, Queens, Brooklyn or the Bronx. There aren’t a lot of middle class neighborhoods left in Manhattan.

I know, I should probably be at Starbucks to keep the class divide firmly entrenched. But I like my coffee rolls enormous and sugary, and I still balk at Starbucks prices. I remember $0.60 cups of coffee from similar carts in my college days. I can’t bring myself to pay $5 for a coffee unless it’s a special occasion. Yet, that hasn’t kept me from literally pissing away a fortune on wine. The mind works in mysterious ways.

A quick nod is all I would normally exchange with the iron-workers. But I’ve been wearing a Bernie button for the past few weeks and carrying a messenger bag so I have something to pin it to.

Me: Chime in with a comment about the name of the street (Dutch in origin)

Younger Guy: So did you go to the rally last night?

Me: No, wife’s traveling, I had to stay with the kids, but heard it was 47,000 people.

Younger Guy: I’m probably the biggest Bernie supporter in the world, but I’ve never been to a rally. I don’t need to, I’ve been hearing his speeches for years. I always wondered why they kept C-Span so boring, bad cameras and lighting, it’s designed to put you to sleep. Every other program on TV looks a lot better. But C-Span is about the important stuff that really matters, our money and government. I saw Bernie speak eight years ago and here was a guy talking in understandable terms.

Me: You know who else is good, Jon Tester from Montana. I started following him when he was on the financial crisis hearings. He’s got a farm-boy’s understanding of banks, and that’s actually quite good because farmers buy futures and options contracts regularly, so he understands how they work and could put it in plain language.

Younger Guy: I’ve always wondered whether there was anyone else around mid-town who supports Bernie. I figured it was just us, we’re putting up a building over there.

Me: Well I work at one of the big banks. And it’s just like any other place. 20% support Trump…

Younger Guy: That’s crazy.

Me: And maybe 20-25% support Bernie and the rest are split between Hillary and the others.

Older Guy: The union really wants us to vote for Hillary.

Me: She’s got some good things going for her too.

Younger Guy: It’s great that you work up there and support Bernie, shows intellignce. We’re going make sure she doesn’t win New York.

Me: That’s right.

My musings below the fold…

I was thinking about what the younger guy said towards the end. I don’t think my support for Bernie demonstrates any higher intelligence. I have specific reasons for supporting Bernie, and some of it has to do with my understanding of our industry and its history, I’ll talk about that in a bit.

But I do think some of my colleagues write Bernie off because he speaks in a working-class idiom (what the younger guy called “understandable terms”). I think this explains why a large portion of the professional classes dismiss Bernie. He doesn’t conform to their expectations of what a “smart” or “effective” person sounds like. I took a class back in college where we read Deborah Tannen’s work on workplace communication. I learned to pay attention even when someone didn’t know the right nomenclature or speak in a native idiom. That is part of the reason I walked away thinking Jon Tester asked the most probing questions during the financial crisis hearings.

They start out describing a meeting between senior Democrats and a number of senior bankers and PE/hedge fund guys.

One of the big name Wall Street figures stood up, proclaimed grandly that he was speaking on behalf of every financial person in the room, and then slammed into the Democratic lawmakers for having had the audacity even to consider disbanding a low-tax arrangement popular with hedge fund managers known as “carried interest”.

“That was startling to me,” said one of the other financiers present in the room that day. “Here was a gathering of Wall Street’s greatest minds and what were we discussing? Not how to generate more jobs or create an economy that works for everyone, but how to protect our vested interests and tax advantages.”

“New Yorkers are particularly well positioned to see how the rich are screwing over everybody else. You just have to look at real estate prices – people will take a look at what’s happening across the city and a certain number will be disgusted by it: Bernie speaks to them,” he said.

No one should be surprised that there are people in the financial industry who support Bernie. There are numerous reasons to support Bernie, but for some of us, banking reform is among them. Many of us saw careers and lives destroyed and ended up questioning the poor choices that brought us to the edge. Not all of us are sold on the world of larger and larger banks. They can pose greater intrinsic risks to the system, and we’ve seen lots of jobs disappear during mergers.

The crew at the FT’s Alphaville blog (some of the better writing on the goings on at investment banks and asset managers) took Bernie’s view that the “business model of Wall Street is fraud” seriously. They considered both the level of malfeasance in various business lines, and the bigger questions of public backstops for banks and how they encourage riskier behavior. They conclude:

It may not be fraud under a strict legal definition, but it’s not nuts to think deception is essential to the industry.

The Guardian piece mostly quotes guys at smaller independent firms who may feel freer to speak their minds. It does have a couple of anonymous quotes from a portfolio manager at a large hedge fund. My own take is that people in middle management, the ranks, and support functions at big firms are a lot more amenable to Bernie’s message. Age plays a role in how amenable people are to Bernie as well.

Many supporters do not want to show up on donor lists their employers may see. That often means even sub-$200 donations are off the table, because securities firms generally require employees to obtain pre-approvals for political contributions (contributions to certain candidates can shut the firm out of muni-underwriting or pension business in certain states). Others keep their support buttoned up because they don’t want to ruffle too many feathers at work.

Now, that doesn’t mean we enjoy seeing our companies pilloried in the presidential elections. But we understand why there is legitimate criticism and anger towards our industry. Most people who work in the industry believe they are performing a valuable function, but we also know many of our colleagues have tunnel vision that blinds them to broader concerns. Many among us were truly angry at the complete abrogation of responsibility and duty shown by people in the business lines that were at the center of the crisis. A number of us have a far more jaundiced view of senior managers than we did prior to the crisis. And this distrust carries over to politicians seen to be closely connected to them.

“She [Hillary] has a thousand talking points, but when the lights are turned off and all the glare of the election fades, politics-as-normal will return, the lobbyists will get to work, and nothing at all will happen,” he said.

Frank, still speaking anonymously, agrees. “Hillary Clinton is paying lip-service to Wall Street changes. Maybe in her heart she means business, but for me income inequality is the civil rights issue of our time, and I feel strongly we need a president who is totally committed to making this happen.”